RBI permitted the issue of commercial papers within the framework of its guidelines. Which one of the following committees recommended these guidelines?

Correct option is D

The Vaghul Committee, established in the mid-1980s, played a pivotal role in recommending reforms for developing the Indian money market. One of its key recommendations was the introduction of commercial papers (CPs) as a short-term debt instrument to enable companies to raise funds efficiently. The Reserve Bank of India implemented these recommendations, permitting the issue of CPs under specific guidelines.
Information Booster
· Commercial Papers (CPs):
· CPs are unsecured, short-term promissory notes issued by companies to meet their working capital requirements.
· They are usually issued at a discount and redeemed at face value.
· Vaghul Committee Contributions:
· Recommended steps to deepen and develop the Indian money market.
· Introduced instruments like CPs and Certificates of Deposit (CDs).
· Encouraged transparency and competition in the financial sector.
Additional Knowledge
1. Verma Committee: Focused on restructuring weak public sector banks.
2. Padmanabhan Committee: Focused on banking supervision and risk management.
3. Kalia Committee: Recommended reforms in agricultural credit systems.
4. Vaghul Committee: Played a significant role in introducing modern financial instruments to improve liquidity and efficiency in the money market.